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India looking for investors to back strategic oil reserves: executive

SINGAPORE (Reuters) - India will start international road shows next month seeking potential investors for the second phase of its strategic oil reserves estimated to cost nearly $2 billion, the head of the operator of country’s reserves said on Wednesday.

An Oil and Natural Gas Corp's (ONGC) well is pictured in an oil field on the outskirts of the western city of Ahmedabad, India, February 10, 2016. REUTERS/Amit Dave/Files

India Strategic Petroleum Reserves Ltd (ISPRL) will hold the road shows in the last week of October in Singapore, London and New Delhi, Chief Executive H.P.S. Ahuja said on the sidelines of the Tank Storage Asia Conference.

India’s government approved the two strategic petroleum reserve (SPR) sites with a total capacity of 6.5 million tonnes in June.

One site will be located in Chandikhol in the eastern state of Odisha with a capacity of 4 million tonnes at an estimated cost of about $941 million, Ahuja said.

The second site will expand an existing SPR at Padur in the southwestern state of Karnataka by adding 2.5 million tonnes of storage at a cost about $662 million with construction and filling planned through a public-private partnership model, Ahuja said.

The existing Phase 1 of the Padur storage site, with a capacity of 2.5 million tonnes was commissioned last week, he said.

“During the Phase 2 constructions, we also plan to take up the filling of Padur Phase 1. So any player who is interested should submit their interests during the road shows,” said Ahuja.

The two sites will add to India’s other two SPR sites at Vishakhapatnam and Mangalore, which hold a combined 2.8 million tonnes.

ISPRL, a wholly-owned subsidiary of India’s Oil Industry Development Board, in an agreement with Abu Dhabi National Oil Company (ADNOC) received its first consignment of 2 million barrels of oil in May to fill one of the compartments at Mangalore.

The current capacity of India’s SPR can meet about ten days of the country’s requirements and together with the two additional reserves, which will be finished in another six to seven years, would be able to meet about 22 days of the country’s needs, Ahuja said.

The country currently imports 82 percent of its crude requirements, he added.

India’s stockpiling of crude should not be affected by the loss of Iranian oil imports because of sanctions by the United States.

“We’re not dependent on state oil companies to get the reserves. It’s the government of India, who decides when to fill it up. It’s a call by the government and can be done from anywhere in the world,” Ahuja said.

Reporting by Koustav Samanta; Editing by Christian Schmollinger